Drewry WCI rises 3% on higher demand; war impact limited

The Drewry World Container Index (WCI) increased 3.10 to $1,958 per FEU (Forty-foot Equivalent Unit) for the week ending March 5, after consecutive decline in the last seven weeks. The index stood at $1,899 per FEU in the week ending February 26. The index increased mainly due to an increase in rates on the Transpacific trade routes. Container shipping rates gained on rise in demand after Chinese New Year. Geopolitical struggle disrupted mainly oil tanker movement through the Strait of Hormuz.

According to the report, spot rates on Asia-Europe trade routes remained under pressure, with rates on Shanghai-Rotterdam falling 2 per cent to $2,052 per 40-foot container and those on Shanghai-Genoa increasing only 1 per cent to $2,844. Since volumes typically rebound in March as factories across Asia reopen, carriers have started planning capacity induction, with only four cancelled sailings announced on the Asia–Europe/Mediterranean trade route over the next two weeks. Hence, we expect spot rates on this trade to increase in the coming weeks.

Spot rates from Shanghai to Los Angeles increased 10 per cent to $2,402, while those on Shanghai to New York increased 7 per cent to $2,977 per 40-foot container.

The rebound in the Drewry World Container Index signals a gradual recovery in container demand after Chinese New Year, particularly on Transpacific routes.
While Asia-Europe rates remain under pressure, limited blank sailings and factory restarts could support further gains.
However, geopolitical tensions around Strait of Hormuz may raise bunker fuel costs and add upward pressure to freight rates.

Rates from New York to Rotterdam increased 1 per cent to $964 per FEU, while Rotterdam-New York eased 2 per cent to $1,570 per FEU. Rotterdam-Shanghai rates steadied at $543 per FEU, and Los Angeles–Shanghai at $724 per 40-foot container.

According to Drewry’s Container Capacity Insight, only four blank sailings have been announced for the next week on the Transpacific East and West Coast trade routes, much lower than this week, as factories gradually return to full production after the CNY. Drewry thus expects spot rates on this trade to increase in the coming weeks.

US and Israeli strikes on Iran have effectively frozen tanker movement through the Strait of Hormuz, which carries around 20 per cent of global oil supply, pushing crude oil prices higher amid supply concerns. If the situation persists, rising bunker fuel costs, war-risk premiums and operational disruptions could increase overall freight costs and place upwards pressure on container shipping rates.

Fibre2Fashion News Desk (KUL)